The Committee on Economic, Social and Cultural Rights’ General Comment on States Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities (the General Comment) sheds a very welcome light on pillars 1 and 3 of the UN Guiding Principles on Business and Human Rights (UNGPs). As stated in an earlier article General Comments are not strictly speaking legally binding, but they are authoritative interpretations of legally binding commitments. This being the case this document is critically important for governments when enacting their National Action Plans on Business and Human Rights or otherwise seeking to implement the UNGPs, and for business organisations when deciding what their strategy and policies will be in terms of human rights and the impacts they have as business entities. This follow up article looks particularly at corporate accountability, victims’ access to remedy, enforcement and judicial remedy for human rights abuses by business entities.
Corporate Accountability and Access to Remedy
The General Comment reminds States of their often-forgotten duties to hold companies legally to account when they abuse human rights. Paragraph 15 of the General Comment calls on governments to ensure that there are criminal or administrative sanctions when companies abuse Covenant rights or where “a failure to act with due diligence to mitigate risks allows such infringements to occur”. The General Comment goes further, pointing out in paragraph 49 that “the most serious violations of the Covenant should give rise to criminal liability of corporations, and/or of the individuals responsible”. It also suggests concrete administrative sanctions for corporate misconduct such as the revision or withdrawal of business licenses, subsidies, tax codes, public procurement contracts, export credit and other forms of State support, privileges and advantages in paragraphs 15 and 50. The General Comment also highlights the importance of ensuring effective means of claiming reparations directly from corporate perpetrators, by urging governments to “enable civil suits and other effective means of claiming reparations by victims of rights violations against corporate perpetrators, in particular by lowering the costs to victims and by allowing forms of collective redress” in paragraph 15. More generally, paragraph 38 reminds states of the need to put in place “effective monitoring, investigation and accountability mechanisms” to “ensure accountability and access to remedies, preferably judicial remedies, for those whose Covenant rights have been violated in the context of business activities.” These constitute clear calls for action to states party to the Covenant to ensure effective monitoring of corporate conduct and criminal, administrative and civil redress in case of abuse.
Difficulty in accessing remedy for victims of corporate human rights abuses
It is a well-known fact that access to remedy is extremely difficult for victims of human rights abuses. This is particularly so when multinational companies are involved, or abuses occur in supply chains that cross many borders and sovereign territories. In order to counter this difficulty, the General Comment states, in paragraph 39, that “States Parties must provide appropriate means of redress to aggrieved individuals or groups and ensure corporate accountability. This should preferably take the form of ensuring access to independent and impartial judicial bodies: The Committee has underlined that “other means [of ensuring accountability] used could be rendered ineffective if they are not reinforced or complemented by judicial remedies”. In addition, paragraph 41 states that “…victims seeking redress must have prompt access to an independent public authority, which must have the power to determine whether a violation has taken place and to order cessation of the violation and reparation to redress the harm done.” Importantly, these remedies should be provided for abuses committed both locally and abroad, as the General Comment clearly articulates in paragraph 30: “The extraterritorial obligation to protect requires States Parties to take steps to prevent and redress infringements of Covenant rights that occur outside their territories due to the activities of business entities over which they can exercise control…”
The General Comment usefully highlights some of the most pervasive and persistent barriers to remedy for corporate human rights abuse. It raises concerns about the protection that company law extends to corporate shareholders in the form of the so-called “corporate veil”. Paragraph 42 explains that “Because of how corporate groups are organized, business entities routinely escape liability by hiding behind the so-called corporate veil, as the parent company seeks to avoid liability for the acts of the subsidiary even when it would have been in a position to influence its conduct.” To address this, the General Comment recommends “establishing parent company or group liability regimes” (paragraph 44).
Victims of corporate abuse often experience great difficulty in defending their rights due to the lack of access to relevant information, including information that could be used as evidence in court to prove a claim of abuse. This is often due to the fact that much of this information is in the hands of the corporate perpetrator who, unless forced to, will not release it. The problem is exacerbated by the fact that generally procedural rules impose on claimants the burden of proving every element of their claim. Without access to the relevant evidence, this can be very challenging. The General Comment also acknowledges this problem in paragraph 42: “Other barriers … include the difficulty of accessing information and evidence to substantiate claims, much of which is often in the hands of the corporate defendant…”. To address this, it urges States in paragraph 45 to “facilitate access to relevant information through mandatory disclosure laws and by introducing procedural rules allowing victims to obtain the disclosure of evidence detained by the defendant. Shifting the burden of proof may be justified where the facts and events relevant for resolving a claim lie wholly or in part within the exclusive knowledge of the corporate defendant.”
Paragraph 43 addresses the issue of forum non conveniens, another challenge to effective access to remedy in jurisdictions such as Canada and the USA: “In some jurisdictions, the forum non conveniens doctrine, according to which a court may decline to exercise jurisdiction if another forum is available to victims, may in effect constitute a barrier to the ability of victims residing in one State to seek redress before the courts of the State where the defendant business is domiciled. Practice shows that claims are often dismissed under this doctrine in favor of another jurisdiction without necessarily ensuring that victims have access to effective remedies in the alternative jurisdiction”. To address this problem, the General comments recommends in paragraph 44 that “The extent to which an effective remedy is available and realistic in the alternative jurisdiction should be an overriding consideration in judicial decisions relying on forum non conveniens consideration”. This is particularly important when one reflects back on serious cases of corporate human rights abuse such as that of the 1984 lethal gas leak of Bhopal and the ongoing battles for accountability and redress decades after the events.
Other challenges for victims of corporate human rights abuses, rightly highlighted in the General Comment, include the lack of class action mechanisms when large numbers of people are affected by corporate abuses, the lack of legal aid and financial support to fund cases, the difficulties in ensuring effective cross border judicial and law enforcement collaboration and the threat of defamation claims against those who raise concerns or highlight corporate abuses. In some countries people con be criminally prosecuted for alleged defamation, making the risks even higher. On this point, the UN Working Group on Business and Human Rights in a recent paper commented on the fact that “Civil society also finds itself with fewer avenues to express concerns regarding human rights issues, and also fears criminal prosecution when engaged in public protest or civil dissent.” The comments by the Committee on Economic, Social and Cultural Rights and the UN Working Group on this issue point to a double difficulty facing people affected by corporate abuse. On the one hand, victims of abuse encounter extraordinary difficulties in accessing effective remedy. On the other, human rights defenders denouncing corporate wrongdoing or the lack of remedy experience persecution and threats of legal action.
Usefully, the General Comment also addresses this problem. It notes in paragraph 44 that “The introduction by corporations of actions to discourage individuals or groups from exercising remedies, for instance by alleging damage to the corporations’ reputation, should not be abused to create a chilling effect on the legitimate exercise of such remedies.” Specifically in relation to human rights defenders, it urges States in paragraph 48 to “refrain from resorting to criminal prosecution to hinder their work, or from otherwise obstructing their work.”
Finally, the General Comment addresses the often neglected area of State-Based Non-Judicial Remedy. Apart from OECD National Contact Points and National Human Rights Institutions, debates and processes in the area of business and human rights seem to have forgotten the plethora of existing, potentially really effective, State-based mechanisms to control corporate behaviour. For this reason, it is useful that paragraph 54 of the General Comments states that “States parties should make use of a wide range of administrative and quasi-judicial mechanisms, many of which already regulate and adjudicate aspects of business activity in many States Parties, such as labour inspectorates and tribunals, consumer and environmental protection agencies and financial supervision authorities. States Parties should explore options for extending the mandate of these bodies or creating new ones with the capacity to receive and resolve complaints of alleged corporate abuse to certain Covenant rights, investigate allegations, impose sanctions, and provide and enforce reparations to the victims.” The General Comments goes further by clarifying that “non-judicial remedies should also be available in transnational settings.”
Thanks to this very comprehensive articulation of the scope of state obligations in the context of economic, social and cultural rights and business activities, the way forward is clearer today than it was two weeks ago, and there can be no reason to doubt the steps states parties must take to ensure effective corporate accountability and remedy for corporate abuses and, in doing so, a fairer world for everyone.
Gabriela Quijano, Legal Advisor, Business and Human Rights, International Secretariat, Amnesty International, UK
Mary Mayenfisch-Tobin, Advisor, Business and Human Rights & Education, Lausanne, Switzerland
7th July 2017
Many thanks to Gabriela Quijano who co-authored this article.
Gabriela Quijano is the legal adviser on business and human rights at the International Secretariat of Amnesty International. Since 2009 she has led the organisation’s work on access to remedy for business-related human rights abuses, doing research, legal analysis and advocacy on corporate legal accountability and access to effective remedy for corporate human rights abuses. She is the lead author of Amnesty International’s book “Injustice Incorporated: corporate abuses and the human right to remedy” published in March 2014. Gabriela holds a Masters degree on Human Rights from the Human Rights Centre of Essex University. She practised law in Buenos Aires, Argentina, before moving to the UK.
Contact details. Gabriela Quijano, Legal Adviser, Business and Human Rights International Secretariat, Amnesty International, Telephone: +44 (0)20 7413 5663 Twitter:@gabymquijano